How to Calculate Shipping and Forwarding Cost of Apparel Export Order?

Estimation of Forwarding and Shipping Cost:

In apparel manufacturing industry, shipping and forwarding cases normally follow the commercial department. The responsible person must have clear concept about the necessary shipping terms and conditions. Otherwise, apparel shippings and forwarding cost may increase.
 Fig: Shipping and forwarding cost calculation method

Shipping Cost calculation Method in Export-Import Business:
Find out the shippings and forwarding cost per apparel by following the below chart.
 SL No. Parameters Quantity & Cost 01 Order quantity 10000pcs apparel 02 Total value Rs. 1000000 03 1 carton box 200 apparel 04 Carton box size 60cm× 40cm× 30cm 05 Freight charge for shoppers \$40/m3 (1\$= Rs. 45) 06 Terminal handling charges Rs. 250/m3 07 Documentation charges Rs. 1000 08 Transportation Rs. 8000 09 Port charges Rs. 10000 10 Custom expenses Rs. 12000 11 Insurance charges (If any) Rs. 12000 12 Agent commission 0.2% of total value of the order 13 Service charge Rs. 2000

Solution:
The below formula has to apply in apparel shipping and forwarding cost calculation method:

Apparel shipping and forwarding cost per apparel,

Total expenses related with shipping
…………………………………………………..        ……….. (1)
Shipping quantity

Now,
Total carton box,
= (Order quantity/No. of apparel in each carton)
= (10000/20)
= 50

Again,
Carton box volume,
= (0.6m × 0.4m × 0.3m)
= 0.072m3

So,
Total volume stands at,
= (No. of carton box × Volume of carton box)
= (50 × 0.072)
= 3.6m3

All Shipping Expenses Calculation:

Freight cost,
= (Total volume × freight charge × Rs. 45)
= (3.6 × \$40 × Rs. 45)
= Rs. 6480

Again,
Terminal handling charge,
= (Total volume × charge)
= (3.6 × Rs. 250)
= Rs. 900

Again,
Documentation charge – Rs. 1000
Transportation charge – Rs. 8000
Port charges – Rs. 10000
Custom expense – Rs. 12000
Insurance charge – Rs. 12000
Agent commission (0.2% of total value) – Rs. 2000
Service charge – Rs. 2000

So,
Total expense cost stands at,
= Rs. (6480 + 900+1000+8000+10000+12000+12000+2000+2000)
= Rs. 54380

Now,
From the equation-01, we get,

Apparel shipping and forwarding cost per apparel,

= (54380/10000)
= Rs. 5.45